The US economy is slowing. The instinct across banks, fintechs, and crypto companies is to pull back. The institutions that came out of the last downturn as category leaders did the opposite. They protected the balance sheet, then kept building the foundations competitors deferred: licensing footprint, compliance program maturity, risk infrastructure, and product resilience.
Why fintech growth still matters in a slowing economy
Fintech is no longer a sidecar to financial services. It is one of the operating systems of the global economy. The main factors behind fintech growth include smartphone adoption, strong consumer demand for personalized and digital-first services, open banking rules, and the integration of AI and blockchain. Payments, lending, embedded finance, digital assets, and AI-enabled risk infrastructure now run inside the daily activity of consumers, small businesses, and large institutions. When fintech slows, credit access, payment velocity, and small business formation slow with it.
The World Economic Forum’s 2025 Future of Global Fintech report finds the industry moving from rapid expansion into a more sustainable growth phase, with continued contribution to economic output and financial inclusion across regions. Those developments are being accelerated by consumer demand, commercial AI adoption, embedded finance infrastructure, and regulatory shifts toward open banking and digital assets. For example, payments modernization and tokenized deposits show how those drivers are moving into execution.
WEF research also says 90% of firms cite consumer demand as the primary growth enabler. J.P. Morgan’s 2026 fintech outlook shows the sector exiting a roughly 3-year capital lull, with deal counts and dollars re-accelerating into payments modernization and tokenized deposits. F-Prime’s State of Fintech 2026 makes the point bluntly: Nubank, Revolut, SoFi, Stripe, Adyen, Toast, and Robinhood are now category leaders, with deposit and payment volumes that put them in the top tier of US bank scale.
The question for US financial services leaders is not whether fintech keeps growing. The question is who builds the compliance, licensing, and risk operations to capture that growth as the cycle tightens.
Where the US economy actually sits in 2026
The US is not in recession. It is decelerating, with a decline in pace rather than a full recession, and real downside risks that financial services leaders should plan against.
- Stanford SIEPR’s 2026 outlook expects modest job growth and a stable unemployment rate near current levels, with “meaningful downside risks,” including AI-driven hiring drag.
- Polymarket’s recession-by-end-of-2026 market shows unemployment around 4.3%, consensus 2.1 to 2.5% full-year GDP growth, headline CPI at 3.8% in April, core PCE in the 2.6 to 2.9% range, and the Fed on hold at 3.50 to 3.75%.
- Deloitte’s 2026 to 2030 forecast models a downside scenario tied to an AI capex pullback, with a business-investment contraction shallower than the dot-com bust or the Great Recession.
Interest rates, inflation, and unemployment shape fintech adoption in opposite directions at the same time. Elevated rates compress lending margins and pressure deposit-funded models. Persistent inflation pushes consumers and small businesses toward value-driven digital tools. A stable but softening labor market can weigh on broader economic activity while still accelerating demand for credit access, financial decisioning, and small business cash management. The net effect over the last 15 years has been more fintech adoption, not less, during stress periods across multiple countries.
The historic case for building through downturns
The research on what separates winners from survivors in a downturn is consistent across four decades, and economists and management researchers have reached similar conclusions about downturn investing, consistent with what fintech operators have lived through twice in the last 20 years.
Gulati, Nohria, and Wohlgezogen studied 4,700 public companies across three recessions for Harvard Business Review. The 9% that came out stronger pursued a balanced strategy: selective cost discipline on operations paired with continued investment in capabilities and assets.
Ioannou and Flammer reached a similar conclusion in Harvard Business Review in 2019. Firms that maintained investment in long-term capabilities during downturns delivered higher post-recession performance than peers that retrenched.
Bain and McKinsey research on the Great Recession found that the top 10% of companies grew earnings through and beyond the downturn. The differentiator was preparation, not luck: discipline around debt, decisive leadership, and rapid investment in foundational capabilities.
The pattern goes back further. American Express was founded in 1850. Allstate was founded inside Sears in 1931 during the Great Depression. Charles Schwab built the discount brokerage category through the 1973 to 1975 recession by re-engineering trade execution while incumbents protected commission revenue. The pattern in financial services is durable: when standards fall, downturns still reward operators who are better prepared to invest in cheaper, faster, more transparent customer relationships and in the compliance and risk infrastructure that lets those relationships scale, while some downturns were worse for weaker operators.
Banks and fintechs that built through the last downturn
Banks that used the 2008 crisis to compound
JPMorgan Chase entered 2008 with what Jamie Dimon called a “fortress balance sheet,” lifted Tier 1 capital from 8.4% to 10.9% during the year, raised credit loss reserves to $24 billion, and used the position to acquire Bear Stearns and Washington Mutual at distressed prices, preserving employment capacity and capital flexibility while weaker banks retrenched. Those acquisitions vaulted JPMorgan into its current largest-US-commercial-bank position, a strategy Jamie Dimon described in his 2008 shareholder letter.
Wells Fargo outbid Citigroup for Wachovia in September 2008, tripling its mortgage book and capturing roughly 28.8% of US home loans by year-end 2008.
US Bancorp’s conservative underwriting going into the crisis allowed the bank to absorb FDIC-assisted acquisitions, protect revenues, and compound a best-in-class efficiency ratio into record fee revenue in 2025 and 2026.
A caveat worth naming. Bank of America’s Countrywide and Merrill acquisitions and Wells Fargo’s expanded mortgage book also produced years of remediation costs. Acquisition without compliance integration capacity is a liability, not an asset.
Fintechs that built core financial products into the credit crunch
The cohort that defined modern fintech launched into the worst US downturn since the Depression. Many fintech companies targeted high-friction banking segments to capture market share as incumbents pulled back.
- Square (2009) built card acceptance and small-business lending infrastructure exactly when SMBs were being shut out of merchant services and credit.
- Stripe (2010) built developer-first payments rails while incumbent processors retrenched, then layered banking, treasury, and issuing products on top.
- Venmo (2009) built a P2P payments wedge inside the post-crisis distrust of traditional bank money movement.
- Kabbage (2009) and OnDeck (2007) underwrote small-business credit using cash-flow and transaction data when banks were rationing capital, reflecting alternative lending models that captured meaningful consumer and SMB demand outside traditional credit scoring.
- NerdWallet (2009) and CreditKarma (2007) built consumer financial decisioning platforms on the thesis that downturn consumers search harder for value, with digital solutions that also improved access for underrepresented customers through alternative scoring and wallets.
- Coinbase (2012) invested in licensing (money transmission across nearly all US states, NYDFS BitLicense, trust charter) before competitors did. That licensing footprint became its institutional moat.
- [Plaid (2013)](https://en.wikipedia.org/wiki/Plaid_Inc.) built the bank-data connectivity layer the post-2008 fintech wave depended on.
The common thread is operational. These companies invested in the foundations that compound over a decade: capital, credit underwriting, licensing footprint, fraud and AML controls, and partner-bank readiness. They were positioned to capture demand when the cycle turned, because the regulators, partner banks, and customers they needed already trusted them.
How the global fintech market is moving
Fintech growth is not evenly distributed, and the regional pattern matters for US operators that touch cross-border flows.
- Americas: The US remains the deepest fintech market by deal value, and in 2025 the region captured the largest share of global fintech investment at $66.5 billion across 2,409 deals, with the US alone accounting for $56.6 billion across 1,977 deals. This happened while global investment recovered to $116 billion year over year from a seven-year low of $95.5 billion while deal volume fell to an eight-year low of 4,719 deals. The J.P. Morgan 2026 outlook shows capital re-accelerating into payments and tokenized deposits after a three-year lull. Latin America’s neobank cohort, anchored by Nubank, has built deposit scale that rivals US super-regional banks.
- Europe: Revolut, Adyen, and SoFi have scaled retail and merchant volumes that compete with incumbent banks.
- Asia Pacific and the Middle East: Cross-border payments, digital wallets, and stablecoin pilots continue to outpace US adoption rates, with China standing out as a key mobile-first market and the World Economic Forum highlighting financial inclusion gains in underbanked markets.
For US banks and fintechs, the regional picture is a planning input, and activity across the rest of the world still matters for cross-border planning. Cross-border product launches, correspondent relationships, and stablecoin rails require US compliance posture that holds up against EU, UK, MAS, and FATF expectations at the same time.
What is actually driving fintech growth into 2026
Four drivers keep compounding regardless of the macro cycle, and the fintech market is expected to keep expanding at a CAGR of 18.20% from 2026 to 2034.
- Demand for digital financial services and cross-border payments. Consumers and small businesses expect real-time, mobile-first money movement, and incumbents that cannot match it lose volume to fintech rails.
- AI, blockchain, and digital assets. AI is reshaping fraud detection, credit scoring, customer service, and personalization. Blockchain and tokenization are reshaping settlement, custody, and asset issuance.
- APIs and open banking. Secure Application Programming Interfaces (APIs) have shifted from a luxury to an industry baseline, integrating fintech directly into the workflows of incumbent banks and enterprise customers. Open banking payment transactions are projected to scale sharply, and legacy banks are implementing clean APIs to support seamless third-party data sharing. By leveraging APIs, non-financial platforms are embedding banking services directly into their ecosystems, reducing reliance on standalone bank portals. The Financial Technology Association points to open banking rights and Federal Reserve master account access as defining policy fights for 2026.
- Hyper-automation. AI-assisted product development, document review, and risk operations compress the cost of building and running a fintech, which is exactly why downturns no longer halt new entrants.
Each driver is also a compliance vector. AI introduces model and bias risk. Open banking introduces data privacy and third-party risk. Tokenization introduces custody, settlement, and securities law risk. Cross-border flows introduce sanctions and AML risk. Growth and compliance maturity move together as these shifts push the financial sector toward more cooperative digital infrastructure, or they do not move at all.
Digital assets and the regulatory environment
Stablecoins, tokenized deposits, and tokenized real-world assets are the most active product category in 2026. BDO’s 2026 fintech predictions note that regulatory clarity is the gating factor for mainstream adoption, and that fintechs are increasingly leaning on institutional bank partnerships and traditional infrastructure to launch compliant tokenized products. J.P. Morgan flags deposit tokens such as JPM Coin as emerging critical infrastructure.
For compliance and risk leaders, this translates into concrete work.
- Licensing. Money transmission, trust charters, NYDFS BitLicense, and state-by-state digital asset frameworks need to be mapped to product roadmap. Equinox’s Money Transmitter License Requirements guide walks through the surety, net-worth, and reporting baselines.
- BSA and AML. Stablecoin issuance, custody, and on-chain transaction monitoring require updated risk assessments, typologies, and SAR procedures.
- Sanctions. OFAC screening of on-chain counterparties, wallet attribution, and travel rule data sharing are operational asks regulators expect to see in production.
- Data privacy and security. Tokenization platforms aggregate sensitive customer and counterparty data. State privacy laws and federal banking guidance both apply.
AI and technology integration inside compliance and risk
AI is no longer experimental inside financial services. It is now embedded in fraud detection, credit scoring, customer service, marketing personalization, and increasingly in compliance operations themselves. As AI-driven cyber threats increase, platforms are deploying real-time automated fraud prevention and decentralized identity measures.
The upside is real. AI can compress alert review queues, draft policy and procedure updates, summarize regulatory change, and accelerate exam preparation, as fintechs move from pilot projects to scalable, ROI-driven applications. Hyper-automation uses AI, deep learning, and advanced robotic processes to remove manual compliance and underwriting work. AI-powered chatbots and virtual assistants also improve support speed and the overall customer experience. The risk is also real. Federal regulators have signaled that AI and model governance (SR 11-7, OCC model risk guidance, and emerging fair lending and explainability expectations) applies to AI systems just as it does to traditional models. Bias, drift, vendor opacity, and over-reliance on third-party models are all live issues.
The operating principle: deploy AI where it shrinks queues and accelerates evidence, then govern it the way you govern any other model. Inventory, validation, monitoring, ownership, and documented exception handling are the difference between a useful tool and an examination finding, while AI is also letting firms build and test products in weeks instead of years.
Fintech market segments and business models
Four segments now anchor the US fintech landscape, and each one has its own compliance profile.
- Payments. Card acquiring, real-time payments, cross-border, and stablecoin rails. Compliance pressure points: money transmission licensing, BSA and AML, sanctions, fraud, and consumer disclosures.
- Lending. Consumer, small business, BNPL, and embedded credit. Pressure points: state lending licensing, fair lending and UDAAP, credit reporting, and model risk.
- Embedded finance and Banking as a Service. Fintechs distributing financial products through non-financial brands. Financial products are now natively integrated directly inside non-financial platforms, including e-commerce checkouts, healthcare portals, and ride-hailing services. Pressure points: partner-bank oversight, third-party risk, complaint management, and compliance ownership across the stack.
- Horizontal infrastructure. Identity, fraud, data connectivity, ledger, and risk-ops platforms. Low-barrier digital investment apps and AI-driven robo-advisors have pushed wealth management divisions to lower fee structures. Pressure points: data privacy, information security, and vendor governance.
The Banking as a Service model has matured under heavier regulator scrutiny since 2023. Some traditional banks also lease out their regulatory charters to fintech non-banks through BaaS frameworks, which has increased pressure on incumbent financial institutions. Partner banks are running tighter oversight programs, asking for more granular evidence, and exiting non-strategic programs faster. Fintechs that anticipate that posture and bring partner-bank-ready compliance programs to the table are the ones that survive sponsor consolidation.
Investment and funding trends
Fintech funding contracted sharply between 2022 and 2025, then began to rise again. Even so, fintech activity recovered unevenly as deal counts stayed low, following a broader decline in capital availability, with the rebound more visible in the second half of the year. J.P. Morgan’s 2026 outlook tracks quarterly capital invested moving back toward $11 billion ranges and deal counts climbing. QED Investors’ 2026 predictions point to AI-native financial services, regulatory evolution, and maturing business models as the value-creation themes.
For operators, two practical implications follow. First, capital is available again for fintechs with credible compliance and licensing posture, and not available at all for those without it. Second, investor diligence has shifted. Risk, BSA, partner-bank standing, and licensing footprint now sit alongside ARR and CAC in the data room.
Challenges and risks operators should plan against
- Evolving regulation across many jurisdictions. State, federal, and international expectations rarely align, and many countries impose different privacy and cybersecurity requirements. Compliance programs need to be designed to satisfy the strictest applicable regulator without slowing product delivery.
- Cybersecurity threats. Account takeover, social engineering, vendor compromise, and generative-AI-enabled fraud are accelerating. Privacy and security compliance is also a major challenge for fintech companies under regimes such as GDPR, as they protect sensitive financial information from cyber threats. Information security, fraud, and BSA functions need to operate as one.
- Market and credit risk. Slowdowns reshape loss curves quickly. Reforecast early, document model changes, and tighten high-risk segments before regulators or auditors ask.
- Third-party and partner-bank risk. A program is only as defensible as the weakest vendor in the stack. Refresh due diligence, control mapping, and exit planning.
- AI and model risk. Bias, drift, and explainability gaps will produce both consumer harm and enforcement risk. Govern AI now, not after deployment.
The 2026 operator playbook
For banks, fintechs, and crypto companies navigating this slowdown, the work falls into three categories.
Protect the balance sheet and the book
- Reforecast credit, fraud, and model assumptions. Recalibrate models, refresh challenger models, and tighten thin-file or high-DTI segments early, especially after a sharp fall in cohort performance. Document model changes for SR 26-2 defensibility (this is an update from SR 11-7).
- Re-examine deposit concentration. After the 2023 regional bank stress, examine uninsured-deposit concentration, single-counterparty risk, and operational resilience of any deposit-taking programs. Update contingency funding plans.
- Tighten unit economics before headcount. Re-price unprofitable cohorts, retire money-losing products, and renegotiate vendor contracts before cutting roles that generate revenue or manage risk, since overcorrecting too early can cut millions from future revenue.
Build the licensing and partner-bank foundation
- Audit your licensing footprint. Inventory state money transmitter licenses, NMLS endorsements, lending licenses, broker-dealer or RIA registrations, and any crypto authorizations. Sequence new applications now since these programs can take anywhere from 6 – 18 months for approval.
- Get ahead of MTMA adoption. Align surety, net-worth, and reporting practices to the Money Transmission Modernization Act standard. Equinox’s Money Transmitter License Requirements guide is a useful starting point.
- Strengthen the bank-sponsor relationship. Refresh risk assessments, complaint data, settlement reconciliation, and BSA program artifacts before your sponsor asks. Build the artifact, the owner, and the date for every control so your company can continue to prove itself as a reliable bank partner.
- Plan for charter optionality. Evaluate the cost and capital implications of a national bank, industrial bank, or trust charter against a partner-bank model to see what makes the most sense for you.
Mature compliance and risk operations
- Close the gaps regulators are flagging now. BSA and AML program effectiveness, sanctions and OFAC screening calibration, fair lending and UDAAP, complaint management, third-party risk, model risk, and AI governance, along with compliance requirements for accounting controls and financial reporting where programs touch payments or stored value. Slowdowns are typically followed by enforcement waves.
- Run independent assessments. Independent BSA, fair lending, and information security assessments produce findings that are cheaper to remediate in a quiet quarter than under a consent order or MRA.
- Operationalize evidence and defensibility. Move from “we have a policy” to documented control owners, evidence repositories, exception logs, and version history.
- Strengthen governance. Refresh board and committee reporting, risk appetite frameworks, and KRI and KCI dashboards. Reinforce second-line independence.
Invest in product and operational resilience
- Productize compliance into the product. Embed identity, sanctions, transaction monitoring, complaints intake, and disclosures into the customer journey.
- Bring on senior compliance and risk operators through a fractional model. Downturns are the cheapest time to add senior compliance, BSA, and risk operators to your team. In expansion years, these hires are slow, expensive, and competitive. In a slowdown, the talent is available, but full-time headcount is hard to justify to the board.
- Invest in the next category infrastructure. Real-time payments access, deposit tokens, stablecoin rails, and AI-assisted risk operations are accelerating, not slowing. Build the compliance and licensing scaffolding for the products you plan to launch in 12 to 24 months.
A closer look at fractional compliance and risk leadership
The fractional model resolves a tradeoff that gets sharper in a slowdown. Instead of carrying a full-time CCO, BSA Officer, or Head of Risk through an uncertain demand environment, you bring in a senior operator at the level of seniority regulators and your partner bank actually expect, sized to the workload you have right now.
This is what Equinox is built to do. Our team of compliance operators, regulatory strategists, and legal counsel embeds with banks, fintechs, and crypto companies as fractional CCOs, BSA Officers, Heads of Compliance, and risk leads. We bring decades of combined experience from inside banks, fintechs, RegTech companies, and financial technology firms, and we run the program end to end: governance, BSA and AML, sanctions, complaint management, third-party risk, fair lending, model and AI governance, exam readiness, licensing, and partner-bank reporting.
When the cycle turns, you have options. Convert the engagement to full-time with a known operator. Extend the fractional model as a co-pilot for your new in-house hire. Or scale the engagement up with additional Equinox operators to support new products and licensing.
In a slowdown, you do not need fewer senior compliance and risk operators. You need them sized to the moment.
Future outlook
The consensus across J.P. Morgan, BDO, QED, F-Prime, and the World Economic Forum is the same. Fintech growth continues, anchored on payments modernization, AI, stablecoins and tokenization, embedded finance, and open banking, with regulatory clarity as the gating variable. The fintechs and banks that come out of this slowdown in the strongest position will be the ones that pair product innovation with compliance, licensing, and risk infrastructure that holds up under examination.
The bottom line
A slowdown is a sorting event. The banks, fintechs, and crypto companies that treat it as a build window come out as the institutions regulators, partner banks, and customers trust through the next cycle. The ones that simply pull back lose ground they will spend the recovery trying to win back.
The US economy may be slowing. Your compliance, licensing, and risk operations should not.
Considering fractional compliance, BSA, or risk leadership? Equinox can scope an engagement against your current workload, partner-bank expectations, and product roadmap. Reach out to start the conversation.
